ACT Leader Richard Prebble today questioned the wisdom of the Government forcing the sale of embassies abroad.

"Selling the embassy in Paris, which was a gift from the French government, is not just bad diplomacy, it doesn't make sense as a matter of fiscal policy.

"The new double-entry accounting principles adopted by the Government, which include depreciation, are an advance in fiscal accountability - but they are only a tool and should not be applied as rigid ideology.

"Under the new accounting rules, owning embassies in very expensive capital cities such as Paris, London and Tokyo, shows a huge capital charge. But this is just a paper figure.

"As any business can tell you, if you are going to need a building indefinitely in an area where land is short, it is always better to own rather than rent.

"New Zealand is going to want an embassy in Paris indefinitely, so selling is not just a diplomatic blunder, it is also not good business.

"It is time the Public Expenditure Committee held an inquiry into the issue. We need to be flexible in our application of the capital charge. Having transparent accounts at the cost of silly decisions is just bad management," Richard Prebble said.

Ends

© Scoop Media